Defendants-Appellants Gnosis S.p.A. and Gnosis Bioresearch S.A. (together, “Gnosis”) appeal from a September 30, 2012 Opinion After Bench Trial, Merck Eprova AG v. Gnosis S.p.A. (“Merck I ”),
This appeal requires our Court to clarify certain aspects of our false advertising jurisprudence. We conclude that where, as here, the parties operate in the context of a two-player market and literal falsity and deliberate deception have been proved, it is appropriate to utilize legal presumptions of consumer confusion and injury for the purposes of finding liability in a false advertising case brought under the Lanham Act. We further hold that in a case where willful deception is proved, a presumption of injury may be used to award a plaintiff damages in the form of defendant’s profits, and may, in circumstances such as those present here, warrant enhanced damages. For the reasons discussed below, we therefore AFFIRM the district court judgment in its entirety.
BACKGROUND
I. The Parties and their Products
A. Folate
The nutritional ingredient at issue in this litigation is a dietary ingredient called Folate, which is a B vitamin that helps the body make new cells. Folate is considered a critical supplement for prenatal health, and low folate intake is associated with various vascular, ocular, neurological and skeletal disorders, and may pose a serious risk to individuals with diabetes. While folate does not occur naturally in large quantities it can be found in leafy green vegetables, whole grains, citrus fruits, and organ meats. Tetrahydrofolates are the predominant naturally occurring forms of folate, and in particular, the tetrahydrofo-late 5-methyltetrahydrofolic acid (abbreviated as “5-MTHF”) is one of the predominant naturally occurring folate forms.
Stereochemistry is a branch of chemistry that studies the particular arrangement of atoms that form the structures of molecules. See Merck I, 901 F.Supp.2d at
• While there are several different naming conventions for the compounds in this case, two predominate: the Fischer-Rosa-noff convention, which labels isomers either with an “L” or a “D,” based on the isomer’s relation to the glyceraldehyde molecule, and the Cahn-Ingold-Prelog convention, a more formal stereochemical naming convention that uses the symbols “S” and “R” to describe the isomer’s relation to the carbon atom. In the context of folates, L is used to refer to the naturally occurring isomer and D refers to the unnaturally occurring isomer, although the more standard naming conventions would use “S” for a naturally occurring isomer and an “R” for the unnatural isomer. It is important that in nature, each tetrahydro-folate form exists in the “L” (or “S”) ster-eochemical form, though it can also be synthetically manufactured. If synthetically manufactured, a folate would be “mixed,” and this form would be identified as having both “L” and “D” (or “S” and “R”) stereochemical forms: i.e., a mixed compound would be labeled as “D, L” or “R, S.”
As discussed further below, these naming conventions and how particular folate forms are labeled are central to the false advertising claims in this case. Thus, for ease of reference, we use the same naming convention used by the district court: we will generally refer to the naturally occurring isomer as the “6S Isomer Product,” and the synthetically created isomer as a “6R, S Mixture Product.”
B. Merck and Metafolin
Merck & Cie (formerly Merck Eprova AG) is a Swiss corporation and producer of pharmaceutical and dietary ingredients. Since 2002, Merck has sold a folate product under the name METAFOLIN (“Me-tafolin”). Metafolin is sold in bulk to customers who use it in various finished products for resale, including vitamins and dietary and nutritional supplements.
Metafolin is comprised of a naturally occurring, biologically active form of Me-thyltetrahydrofolate (“5-MTHF”). Merck was the first company to manufacture a pure and stable diastereoisomer of L-5MTHF, a 6S Isomer Product, as a commercial source. Merck’s. development of Metafolin was the culmination of decades of research and the investment of tens of millions of dollars. Metafolin is one of Merck’s most important products.
C. Gnosis and Extrafolate
Gnosis S.p.a. is an Italian corporation and Gnosis Bioresearch S.A. is a Swiss corporation (collectively, “Gnosis”). Gno-sis, like Merck, produces raw dietary ingredients for use in the production of nutritional supplements. Merck I,
Between 2006 and 2009 Gnosis printed product specification sheets, brochures and other marketing materials that used the chemical descriptions, terms, and formulas attributed to the pure 6S Isomer Product for the sale and marketing of Extrafolate, its 6R, S Mixture Product. Gnosis had six customers to whom it sold its 6R, S Mixture Product during this time: AHD, Prothera, Thorne, Aceto, Manhattan Drug, and Isochem. Gnosis sold to some of these customers directly, such as AHD and Aceto, and the others indirectly.
In 2007, Merck sued Gnosis, claiming misleading advertising in connection with its use of the pure Isomer Product chemical name and properties in its marketing materials for Extrafolate.
II. Bench Trial
Following a bench trial, the district court determined that Merck had established Gnosis’s liability for false advertising under Section 43(a) of the Lanham Act, 15 'U.S.C. § 1125(a). Merck I,
a. Liability under the Lanham Act 1. Literal and Implied Falsity
The district court concluded that Gnosis recognized that the 6R, S Mixture Product and the 6S Isomer Product had different chemical names. Id. at 447. Gnosis had provided (1) product specification sheets to potential customers, and (2) brochures at sales presentations, and when it delivered its Extrafolate product to customers, included (3) product data sheets, certificates of analysis, and material safety data sheets, all of which identified Gnosis’s Ex-trafolate product by the common name or abbreviation for the pure 6S Isomer Product, rather than the 6R, S Mixture Product, and described the chemical properties of the pure product in all of this material. Id. at 446-48. Gnosis continued to distribute this advertising material until 2009, nearly two years after Merck commenced this litigation against Gnosis. Id. at 446.
From these factual findings, the district court held that Merck had demonstrated the literal falsity of Gnosis’s use of the common name and abbreviation on its product specification sheets, id. at 451, and its brochures, certificates of analysis, and material safety data sheets, id. at 451-52. The court also concluded that Gnosis’s descriptions of the chemical properties of the pure 6S Isomer Product in its brochures, material safety data sheets, and certificates of analysis constituted false advertising because Gnosis’s Extrafolate is not a pure 6S Isomer Product, and as such, though the descriptions were literally true, Gnosis had made impliedly false statements that were intended to mislead customers. Id. at 455. In essence, Gnosis was accurately describing a product it was not selling.
2. Customer Confusion
The district court also held that Gnosis had used the common name and abbreviation as part of a concerted and organized campaign to deceive customers. Id. at
The district court emphasized that it found Gnosis’s story of how it came to opine that its 6R, S Mixture Product should be labeled as a 6S Isomer Product to be “simply fanciful — and false — and discounted] it entirely.” Merck I,
The court determined that Merck was entitled to a presumption of deception with regard to brochures, material safety data sheets, certificates of analysis, and emails that Gnosis sent to customers. Id. at 455. It relatedly found that Gnosis’s conduct was deliberate, “in flagrant disregard of prevailing scientific conventions,” and that Gnosis “intentionally set out to deceive the public.” Id. (internal quotation marks omitted).
3. Injury to Merck
With respect to the statements found to be literally false, the court concluded that because Merck and Gnosis were competitors in the folate market, injury to Merck was presumed. Id. at 451. Using a legal presumption, the court found injury to Merck with regard to the product specification sheets, the common name of the pure Isomer Product on brochures, certificates of analysis and material safety data sheets. Id. Regarding the chemical description of the 6S Isomer Product on Gno-sis’s brochures, material safety data sheets, and certificates of analysis, which the court had found literally true, but impliedly false, the court similarly presumed injury to Merck. Id. at 455.
B. Damages
After concluding that Gnosis was liable under the Lanham Act, the court determined that damages were warranted, in the form of Gnosis’s profits, for three reasons: (1) “to prevent Gnosis from falsely advertising in the future,” (2) to prevent Gnosis’s unjust enrichment, and (3) to compensate for Merck’s lost sales. Id. at 457-59.
The court determined that “equity” dictated that the profits be “enhanced to best reflect the intangible benefits that accrued to Gnosis as a result of its false advertising.” Id. at 460-61. The court awarded Merck an award of three times Gnosis’s profits, for a total of $526,994.13, and prejudgment interest from the time Gnosis first entered the market (March 2006) until the date of the opinion (September 30, 2012). Id. Finally, the court ordered Gno-sis to engage in a corrective advertising campaign “to explain the differences between the pure 6S Isomer Product and the 6R, S Mixture Product,” and awarded attorneys’ fees and costs. Id. at 463; Merck II,
DISCUSSION
On appeal, Gnosis challenges the district court’s conclusion that consumer confusion and injury could be presumed in light of its factual findings, asserting that the court improperly relied on cases involving comparative advertising. Gnosis asserts that the district court’s award of damages on the basis of a presumption of customer confusion and a presumption of injury was improper, because proof of actual consumer confusion and evidence of actual injury to Merck was necessary. Next, Gnosis argues that it was error to award Merck all of Gnosis profits, and further error to enhance the profits by trebling them. Gnosis also challenges the court’s imposition of a corrective advertising injunction, prejudgment interest, and the award of attorneys’ fees and costs. Gnosis asks that on remand, we order that the case be assigned to a different judge so as to “ensure ... impartiality.”
“When reviewing a judgment following a bench trial in the district court, we review the court’s findings of fact for clear error and its conclusions of law de novo.” Tiffany (NJ) Inc. v. eBay Inc.,
I. Liability Under the Lanharn Act
To establish false advertising under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), the plaintiff must first demonstrate that the statement in the challenged advertisement is false. A false advertising claim may be based on one of two “theories.” Tiffany (NJ) Inc.,
A. Presumption of Consumer Confusion
We reject at the outset Gnosis’s argument that the district court erred in imposing a presumption of confusion. We have stated that
[I]t is well settled that in order for a Lanham Act plaintiff to receive an award of damages the plaintiff must prove either actual consumer confusion or deception resulting from the violation, or that the defendant’s actions were intentionally deceptive thus giving rise to a rebuttable presumption of consumer confusion.
George Basch Co., Inc. v. Blue Coral, Inc.,
1. Literal Falsity (Use of the Pure Isomer’s common name in Extrafolate Product Specification Sheets, Brochures, Certificates of Analysis, and Material Safety Data Sheets)
Here, the district court found that the majority of Gnosis’s challenged publications were literally false: that is, Gnosis’s use of the common name for the pure 6S product in its product specification sheets, brochures, certificates of analysis, and material safety data sheets for its Extrafolate product, was a literally false description of Extrafolate, a mixed product. The court’s finding that the use of the pure Isomer name on these publications was literally false in that Extrafolate itself was a mixed product is not clearly erroneous, nor is it a finding challenged by Gnosis on appeal.
We have held in the past that where a defendant’s advertising of products is literally false, a Lanham Act plaintiff need not “provide evidence of actual consumer confusion by resort to witness testimony, consumer surveys, or other such evidence in order to establish entitlement to damages under the Lanham Act.” PPX Enterprises, Inc. v. Audiofidelity Enterprises, Inc.,
In light of this factual finding of literal falsity, the district court was correct to presume consumer confusion from Gno-
2. Implied Falsity (Chemical Description of the Pure Isomer on Extra-folate Marketing Materials)
With respect to the chemical description of the Pure Isomer in brochures, material safety data sheets, and certificates of analysis, the court concluded that the description was literally true “when applied to the pure product,” but used in a manner that was intended to mislead consumers as to the mixed product Gnosis was actually selling. Merck I,
The intention to mislead is certainly clear: Gnosis put a description of the chemical properties of the Pure Isomer 6S product on its Extrafolate materials in order to mislead consumers into believing that they were, in fact, purchasing a Pure Isomer 6S product rather than the 6R, S Mixture Product, Extrafolate. “In such a case, once a plaintiff establishes deceptive intent, ‘the burden shifts to the defendant to demonstrate the absence of consumer confusion.’ ” Johnson & Johnson,
The court specifically noted that Gno-sis’s intent to deceive the public merited the imposition of “a presumption of deceit,” Merck I,
Rule 52 of the Federal Rules of Civil Procedure requires that “[i]n an action tried on the facts without a jury ... the court must find the facts specially and state its conclusions of law separately.” Fed.R.Civ.P. 52(a)(1). Here, with respect to its findings on implied falsity and whether Gnosis had failed to demonstrate an absence of consumer confusion, the court did not explicitly do so. Merck argues that there was no Rule 52 violation because Rule 52(a) only requires the district court to “make sufficiently detailed findings to inform the appellate court of the basis of the decision and to permit intelligent appellate review.” Krieger v. Gold Bond Bldg. Prods., a Div. of Nat’l Gypsum Co.,
“[W]e may proceed with our review despite inadequate findings if we can discern enough solid facts from the record to enable us to render a decision.” Tekkno Labs, Inc. v. Perales,
Though Gnosis maintains that all of its sales during the period in question were to entities that knew they were purchasing the mixture product, this assertion
There was evidence presented that Gno-sis’s direct customers were confused as to what product they were purchasing. Gno-sis claimed that AHD and Thorne were not confused, and clearly understood the products they were purchasing during the relevant period. While there is some testimony to that effect, that evidence is overwhelmed by other testimony, including from an AHD witness that there was some confusion initially that needed to be cleared up about the differences between the Extrafolate mixed product and a high isomer (i.e., a pure isomer) product.
Further, there was ample testimony that AHD’s own customers, Swanson’s and Nature’s Value, were confused. Swanson’s executive testified that after it received a subpoena from Merck, it stopped selling its Activated B-Complex, because “after we read the documents, we found out that we may not be certain what the [folate] ingredient is.” England Dep. Tr. at 50-51. Swanson’s witness further testified that Swanson’s initial understanding was that it was receiving “pure L-5-methyltetrahy-drofolate” from Gnosis. Id. at 95. Lori Newburg, a witness from Nature’s Value, the company that formulated the Activated B Complex for Swanson, testified that Nature’s Value relied on the certificate of analysis provided by AHD, when determining the composition of its folate product from Gnosis. Trial Tr. at 693:10-14. Newburg testified that what Nature’s Value believed it had ordered from Gnosis (via Gnosis’s sales agent, AHD) was the pure form of the product: “I’ve never even known that a D, L [i.e., R, S, or “mixed”] form exists. I’ve not worked with any. Id. at 695-96. She agreed that Nature’s Value would have rejected the material if she “understood it to be the DL form instead of the L form.” Id. at 702.
Isochem’s witness also testified that based on the labeling, Isochem thought it was purchasing the “L form.” And Thorne, another customer, had sent an email to Gnosis (through sales agent AHD) in 2007 asking “is 5-MHTF a R or an S isomer, or a ... mixture?” Id. at 1032. Gnosis’s CEO conceded that it “would seem to be the case” that Thorne did not know that it had been receiving a mixture product. Id. at 1033.
In light of this evidence, even assuming that some of Gnosis’s direct customers were not confused about what they were purchasing from Gnosis, the record readily supports the conclusion that “a significant number of consumers” were misled by Gnosis’s false labeling. See Coca-Cola,
Finally, as mentioned above, this case presents us with two theories of false advertising liability: literal falsity and implied falsity. The district court found both literal and implied falsity in Gnosis’s marketing materials, and found deliberate deception. None of these factual findings or legal conclusions are challenged by Gnosis on appeal. Because we could affirm the district court’s finding of consumer confusion based on its findings of literal falsity alone, see Time Warner,
B. Presumption of Injury to Merck
We next turn to the second presumption applied in this case, and whether it was appropriate to presume injury to Merck under the circumstances.
We reject Gnosis’s initial assertion that a presumption of injury is only applicable to cases of comparative advertising mentioning the plaintiff’s product by name. Indeed, as discussed in greater detail below, the very case that Gnosis relies on, Time Warner,
In cases where, as here, the district court has found literal falsity, we have never required a finding of extrinsic evidence of injury to consumers or to the plaintiff. See Tiffany,
In McNeilab, Inc. v. American Home Prods. Corp.,
In Time Warner, which involved DirecTV advertisements touting the poor picture quality of “cable” generally, we extended the rationale from McNeilab, and held that even though the challenged advertisements never actually mentioned Time Warner Cable by name, “the rationale for a presumption of irreparable harm applies with equal force” because Time Warner “is ‘cable’ in the areas where it is the franchisee.”
On a superficial level, Gnosis is correct that this case is not the typical comparative advertising case, at least as previously contemplated by our Court. That is, unlike in McNeilab, Gnosis did not disparage Merck by actually mentioning Merck’s name in an advertisement. This case also is distinguishable from Time Warner, where DirecTV’s advertisements, which disparaged ‘cable’ generally, were obviously targeted at the only cable provider in their region — Time Warner. However, Time Warner is instructive, in that it involved a two-player market, like we have here. In Time Warner, we emphasized that the district court’s imposition of a presumption of harm was proper for the purposes of imposing the injunctive relief sought by Time Warner.
Gnosis points to Porous Media Corp. v. Pall Corp.,
[W]here a defendant is guilty of misrepresenting its own product without targeting any other specific product, it is erroneous to apply a rebuttable presumption of harm in favor of a competitor. Otherwise, a plaintiff might enjoy a windfall from a speculative award of damages by simply being a competitor in the same market.
We find that in comparative advertising cases where money damages are sought and where there exists proof of willful deception, as here, the reasoning of the injunction cases set forth primarily in the Second Circuit cases is applicable. What little case law exists supports the district court’s use of the presumption of causation and harm to the plaintiff.
The district court clearly considered, and was persuaded by, the fact that this was a market with only two direct competitors. The factual record supports the district court’s finding that Gnosis capitalized on consumers’ desire to purchase a Pure Isomer Product by using the Pure Isomer’s common name in its brochures and marketing materials. Because its only competitor for such a pure product at the time was Merck, it follows that Merck was damaged by Gnosis’s false advertising of a mixed product as a pure one. While “our circuit has expressly disfavored presumptions of harm in cases where the products are not obviously in competition or where the defendant’s advertisements make no direct reference to any competitor’s products,” Ortho Pharm. Corp. v. Cosprophar, Inc.,
We hold that where, as here, a plaintiff has met its burden of proving deliberate deception in the context of a two-player
II. Damages
The Lanham Act specifically contemplates an award of profits, damages and costs. Section 35 provides in pertinent part:
When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 1125(a) or (d) of this title, ... shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.... In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty.
15 U.S.C. § 1117(a). We review a district court’s factual finding for clear error and damages award for abuse of discretion. See George Basch,
A. Lost Profits
“[U]nder any theory, a finding of defendant’s willful deceptiveness is a prerequisite for awarding profits.” Id. “[A] profits award, premised upon a theory of unjust enrichment, requires a showing of actual consumer confusion — or at least proof of deceptive intent so as to raise the rebuttable presumption of consumer confusion.” Id. at 1538 (citing Resource Developers,
We have held that disgorged profits may be awarded in the interests of deterrence. “[A] court may award a defendant’s profits solely upon a finding that the defendant fraudulently used the plaintiffs mark.” George Basch,
We conclude that the district court’s decision to award Gnosis’s Extrafo-late profits from the period in question to
Our precedent permits a district court to award a defendant’s full profits based solely on deterrence. See id. at 1539 (“[W]e have held that a court may award a defendant’s profits solely upon a finding that the defendant fraudulently used the plaintiffs mark.... By awarding the profits of a bad faith infringer to the rightful owner of a mark, we promote the secondary effect of deterring public fraud regarding the source and quality of consumer goods and services.”) (emphasis added) (citation omitted). The question is whether an award of profits requires more than the operation of legal presumptions as evidence of injury and consumer confusion to a false advertising plaintiff.
In a false advertising case such as this one, where the parties are direct competitors in a two-player market, and where literal falsity and willful, deliberate deception have been proved, the presumptions of injury and consumer confusion may be used for the purposes of awarding both injunctive relief and monetary damages to a successful plaintiff. We have already suggested that this may be appropriate in false advertising cases involving literal falsity. In PPX, we noted that in false advertising cases of literal falsity seeking injunctive relief, courts have granted relief based “on the court’s own findings without reference to the reaction of the buyer or consumer of the product.”
B. Trebling of Damages
The district court also determined that an award of Gnosis’s profits did not sufficiently reflect the total harm caused to Merck. Merck I,
Section 35 of the Lanham Act specifically provides that “if the court shall find that the amount of the recovery based on profits is inadequate!,] • • • the court may in its discretion enter judgment for such sum as the court shall find to be just.” 15 U.S.C. § 1117(a). While this enhancement provision, introduced in 1905, “was included to enable courts to redress fully plaintiffs whose actual damages were difficult to prove,” Getty,
The district court clearly set forth its rationale for enhancing the profits award, stating that “ ‘principles of equity’ dictate that an award of Gnosis’s profits should be enhanced to best reflect the intangible benefits that accrued to Gnosis as a result of its false advertising,” Merck I,
Other cases that present less egregious, willful conduct on the part of the infringing party may not warrant such an enhanced damages award. As laid out in Section 35, the question of what sum the district court finds to be “just, according to the circumstances of the case,” is a case-specific inquiry. 15 U.S.C. § 1117(a). Here, the decision to award enhanced damages for the reasons stated cannot be said to be an abuse of the district court’s discretion. We therefore affirm.
C. Other Relief Awarded and Sought
We reject the remaining challenges to the district court’s opinion and order. As set out below, none of the decisions — including the award of prejudgment interest and attorney’s fees, and imposing a corrective advertising injunction — constitute an abuse of the court’s discretion.
1. Prejudgment Interest
Gnosis contends that the court’s award of prejudgment interest to Merck was reversible error, because the award of trebled profits already compensated Merck for the loss of the use of any money.
“Although Section 1117(a) does not provide for prejudgment interest, such an award is within the discretion of the
There was no abuse of discretion here. The district court’s opinion reiterates the exceptional nature of this case throughout, highlighting Gnosis’s willfulness and bad faith, as well as the fact that Merck was the only manufacturer of the Pure Isomer Product at the time Gnosis entered the market with its intentionally mis-labeled 6R, S Mixture Product. Merck I,
2. Corrective Advertising Injunction
The district court’s order of corrective advertising required the following:
(1) the ads shall disclose that the campaign is court-ordered to provide consumers with context for Defendants’ clarification. However, (2) the ads need not disclose that Defendants’ misrepresentations were willful as that is immaterial to the content of the false advertisement. Similarly, (3) the ads shall provide a link to the Court’s opinion to provide greater context; however, the Opinion need not be hosted on Alston & Bird’s [Merck’s counsel] website. Additionally, (4) the ads shall run on Defendants’ homepage as well as their products’ sale page to ensure sufficient market dissemination. Finally, (5-6) the ads need only run on third-party industry websites and in trade magazines where the offending products were or are presently advertised by Gnosis.
Merck II,
Gnosis contends that this corrective advertising campaign, when paired with the district court’s award of damages, constitutes an unfair double recovery. However, the cases Gnosis relied on for this proposition all involve monetary awards following trials where prospective corrective advertising damages were sought and awarded. See, e.g., Callaway Golf Co. v. Slazenger,
Further, Gnosis’s assertion that it is improper to award damages and a corrective advertising campaign is unsupported by the case law. “In a false-advertising case such as this one, actual damages under section 35(a) can include”:
&emdash;profits lost by the plaintiff on sales actually diverted to the false advertiser;&emdash;profits lost by the plaintiff on sales made at prices reduced as a demonstrated result of the false advertising;&emdash;the costs of any completed advertising that actually and reasonably responds to the defendant’s offending ads; and&emdash;quanti-fiable harm to the plaintiffs good will, to the extent that completed corrective advertising has not repaired that harm.
ALPO Petfoods, Inc. v. Ralston Purina Co.,
“It is axiomatic that the contours of an injunction are shaped by the sound discretion of the trial judge and, barring an abuse of that discretion, they will not be altered on appeal.” George Basch,
3. Attorney’s Fees
The Lanham Act provides that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” 15 U.S.C. § 1117(a). As with its award of prejudgment interest, the district court concluded that this was such an exceptional case, and awarded Merck $1,924,962.50 in attorneys’ fees and $287,485.88 in costs. Merck II,
Gnosis asserts that this award of fees and costs was an abuse of discretion, and faults the district court for purportedly failing to trim any fat from Merck’s fee application. Gnosis also contends that the attorney fee award is excessive because it greatly exceeds the profits that were at issue in the case. Neither of these arguments support vacatur of the district court’s attorney fee award.
“Given the district court’s inherent institutional advantages in this area, our review of a district court’s fee award is highly deferential.” McDonald ex rel. Prendergast v. Pension Plan of the NY-
The district court concluded that the hours expended were reasonable, rejecting Gnosis’s challenges to Merck’s attorneys’ use of block billing, vague descriptions of work, and overabundant staffing. Merck II,
As to Gnosis’s claim that the fee award is excessive in light of the profits that are issue in this case, Gnosis provides no legal authority for why ■ such a consideration should factor into this Court’s review on appeal, citing only to New York State Ass’n for Retarded Children, Inc. v. Carey, for its admonishment that “attorney’s fees are to be awarded with an eye to moderation, seeking to avoid either the reality or the appearance of awarding windfall fees.”
Gnosis raises one issue with respect to the district court’s award of costs that may have some traction. That is, under 28 U.S.C. § 1821 and the Lanham Act, the district court likely should not have awarded more than $40 per day in expert witness fees, though the district court awarded $121,394.00 in expert witness fees, which clearly exceeded this threshold. Merck II,
However, Gnosis did not raise this challenge below. “[I]t is a well-established general rule that an appellate court will
4. Miscellaneous Relief Requested
Merck requests that we award it fees and costs associated with this appeal. Such an award is not warranted here. Merck is essentially asking that we impose further sanctions for Gnosis’s bad faith litigation conduct below, however, Gnosis has already been sanctioned by the district court for its conduct. Thus far, Gnosis has conducted itself in an appropriate manner before our Court, and the issues it raised on appeal are not frivolous.
Finally, in light of our decision today, we do not consider Gnosis’s request that we remand the case to a different judge.
CONCLUSION
For the reasons set forth above, the district court’s opinion and orders are AFFIRMED in their entirety.
Notes
. The "6” indicates the particular configuration that exists at the carbon 6 position, for example, "6R, S.”
. Starting in 2009, Gnosis began selling a "nearly pure” 6S Isomer Product, which is not a part of this litigation. See Merck I,
. That is, the chemical properties were "literally true” in that they described the chemical makeup of a pure 6S Isomer Product. What made them literally true but impliedly false is that these 6S Isomer chemical descriptions were used in the marketing for a 6R, S Mixed Product. See Merck I,
. "The failure to use 'D, L’ or 'R, S' in front of the common name can indicate a mixture of stereoisomers.” Weibel Aff. ¶ 40.
. We also note that the history of this case and the record below reveals that the court had previously found Gnosis liable for “egregious discovery violations,’’ Merck II,